Correlation Between ChemoMetec and Genmab AS
Can any of the company-specific risk be diversified away by investing in both ChemoMetec and Genmab AS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ChemoMetec and Genmab AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChemoMetec AS and Genmab AS, you can compare the effects of market volatilities on ChemoMetec and Genmab AS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ChemoMetec with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChemoMetec and Genmab AS.
Diversification Opportunities for ChemoMetec and Genmab AS
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ChemoMetec and Genmab is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ChemoMetec AS and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and ChemoMetec is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ChemoMetec AS are associated (or correlated) with Genmab AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genmab AS has no effect on the direction of ChemoMetec i.e., ChemoMetec and Genmab AS go up and down completely randomly.
Pair Corralation between ChemoMetec and Genmab AS
Assuming the 90 days trading horizon ChemoMetec AS is expected to generate 2.17 times more return on investment than Genmab AS. However, ChemoMetec is 2.17 times more volatile than Genmab AS. It trades about 0.0 of its potential returns per unit of risk. Genmab AS is currently generating about -0.07 per unit of risk. If you would invest 67,000 in ChemoMetec AS on August 28, 2024 and sell it today you would lose (18,420) from holding ChemoMetec AS or give up 27.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChemoMetec AS vs. Genmab AS
Performance |
| Timeline |
| ChemoMetec AS |
| Genmab AS |
ChemoMetec and Genmab AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChemoMetec and Genmab AS
The main advantage of trading using opposite ChemoMetec and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChemoMetec position performs unexpectedly, Genmab AS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Genmab AS will offset losses from the drop in Genmab AS's long position.The idea behind ChemoMetec AS and Genmab AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Genmab AS vs. Ambu AS | Genmab AS vs. DSV Panalpina AS | Genmab AS vs. Bavarian Nordic | Genmab AS vs. GN Store Nord |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |